• 288 days Will The ECB Continue To Hike Rates?
  • 288 days Forbes: Aramco Remains Largest Company In The Middle East
  • 290 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 690 days Could Crypto Overtake Traditional Investment?
  • 694 days Americans Still Quitting Jobs At Record Pace
  • 696 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 699 days Is The Dollar Too Strong?
  • 700 days Big Tech Disappoints Investors on Earnings Calls
  • 701 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 702 days China Is Quietly Trying To Distance Itself From Russia
  • 703 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 707 days Crypto Investors Won Big In 2021
  • 707 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 708 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 710 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 710 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 714 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 714 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 715 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 717 days Are NFTs About To Take Over Gaming?
  1. Home
  2. Markets
  3. Other

Gold Today and Nasdaq 1995

There are technical and fundamental similarities in all bull markets. In the case of Gold today and the Nasdaq in the mid 1990s, there are several key technical similarities. I will show these in two charts.

In this case there are three important similarities. There is a running correction for a few years, the squeezing in of several bollinger bands and finally, a breakout from the price channel. Below is a chart of the Nasdaq. The running correction occurred from 1992 to 1995. As the market began its parabolic ascent (in 1995), all the bollinger bands (20, 40 and 80 week) were squeezed in which suggests a strong move in all time frames. Each time the market touched the lower 80-week band (1984, 1987, 1990, 1994, 1998) proved to be a very important low.

The same things are evident in Gold's chart below. The action since May of 2006 has been a running correction. We showed the form in the last chart. (Essentially, the counter-trend "B" move advances to a new high followed by a "C" decline that bottoms right at or near the previous impulsive top, which in this case is May 2006). Secondly, all of the bollinger bands are squeezing in. The market already touched the lower 40-week band, which hadn't happened since 2005. The market came very close to touching the lower 80-week band. That hasn't happened since 2001. A correction of primary degree is in the later stages.

Conclusion

These charts show how secular bull markets move from steady and gradual to parabolic. The transition involves a long corrective period that is difficult to correctly diagnose until its later stages. The bollinger bands are extremely helpful as they allow us to measure volatility across all time frames. For Gold, its primary correction is near its end while the short and medium term corrections may have a bit more time to go. We'd like to see volatility in those time frames compress a bit more. Stay tuned for our next update, as we'll have more insightful charts.

 

Back to homepage

Leave a comment

Leave a comment